§ 40-20-119 — Reimbursement for warranty work

(a) If a dealer submits a warranty claim to a supplier
while the dealer agreement is in effect or within sixty (60)
days after the termination of the dealer agreement and if the
claim is for work performed before the termination or expiration
of the dealer agreement, the supplier shall accept or reject the
warranty claim by written notice to the dealer within thirty
(30) days after the supplier's receipt of the claim. If the
supplier does not reject the warranty claim in the time period
specified above, the claim shall be deemed accepted. If the
supplier accepts the warranty claim, the supplier shall pay or
credit to the dealer's account all amounts owed with respect to
the claim to the dealer within thirty (30) days after it is
accepted. If the supplier rejects a warranty claim, the
supplier shall give the dealer written or electronic notice of
the grounds for rejection, which reasons shall be consistent
with the supplier's reasons for rejecting warranty claims of
other dealers, both in their terms and manner of enforcement.
If no grounds for rejection are given, the claim shall be deemed
accepted.
(b) Any claim which is disapproved by the supplier based
upon the dealer's failure to properly follow the procedural or
technical requirements for submission of warranty claims may be
resubmitted in proper form by the dealer within thirty (30) days
of receipt by the dealer of the supplier's notification of the
disapproval.
(c) Warranty work performed by the dealer shall be
compensated in accordance with the reasonable and customary
amount of time required to complete the work, expressed in hours
and fractions multiplied by the dealer's established customer
hourly retail labor rate, which shall have previously been made
known to the supplier. Parts used in warranty repair work shall
be reimbursed at the current net price plus fifteen percent
(15%).
(d) For purposes of this chapter, any repair work or
installation of replacement parts performed with respect to the
dealer's equipment in inventory or equipment of the dealer's
customers at the request of the supplier, including work
performed pursuant to a product improvement program, shall be
deemed to create a warranty claim for which the dealer shall be
paid pursuant to this section.
(e) A supplier may audit warranty claims submitted by its
dealers for a period of up to one (1) year following payment of
the claims, and may charge back to its dealers any amounts paid
based upon claims shown by the audit to be misrepresented. If a
warranty claim is misrepresented, then warranty claims submitted
within the three (3) year period ending with the date a claim is
shown by the audit to be misrepresented may be audited.
(f) The requirements of subsections (a) through (c) of
this section apply to all warranty claims submitted by a dealer
to a supplier in which the dealer has complied with the
supplier's reasonable policies and procedures for warranty
reimbursement. A supplier's warranty reimbursement policies and
procedures shall be deemed unreasonable to the extent they
conflict with any of the provisions of this section.
(g) A dealer may choose to accept alternate reimbursement
terms and conditions in lieu of the requirements of subsections
(a) through (c) of this section if there is a written dealer
agreement between the supplier and the dealer that requires the
supplier to compensate the dealer for warranty labor costs
either as:
(i) A discount in the pricing of the equipment to the
dealer; or
(ii) A lump sum payment to the dealer that is made to
the dealer within ninety (90) days of the sale of the supplier's
new equipment.
(h) The discount or lump sum described in subsection (g)
of this section shall be no less than five percent (5%) of the
suggested retail price of the equipment. If the requirements of
subsections (g) and (h) of this section are met and alternate
terms and conditions are in place, subsections (a) through (c)
of this section do not apply and the alternate terms and
conditions are enforceable. Nothing contained in this
subsection or subsection (g) of this section shall be deemed to
effect the supplier's obligation to reimburse the dealer for
parts in accordance with subsection (c) of this section.